JEDDAH: Saudi Arabia’s micro, small and medium-sized enterprises are set to gain access to up to SR5 billion ($1.33 billion) in Shariah-compliant financing under an agreement between the General Authority for Small and Medium Enterprises, known as Monsha’at, and STC Bank. 

The agreement, signed on the sidelines of the Money20/20 conference in Riyadh, aims to strengthen cooperation in developing and supporting the entrepreneurship ecosystem and facilitate SMEs’ access to innovative digital financing products. 

It was signed by Monsha’at Deputy Governor for Planning and Development Suliman bin Abdulrahman Al-Turaif and STC Bank Head of Wholesale Banking Modhie Farih Al-Shammary. 

The financing portfolio will provide Shariah-compliant solutions to micro, small and medium-sized enterprises across various economic sectors, according to the agreement. 

The deal comes as Saudi Arabia’s SME sector continues to expand. The number of SMEs in the Kingdom exceeded 1.7 million in 2025, employing around 8.8 million people and contributing 22.9 percent of gross domestic product, according to the 2025 Vision 2030 annual report. 

“The agreement includes a financing program offering short-, medium- and long-term facilities, both cash and non-cash, with terms of up to 10 years,” Monsha’at said, adding that the facilities will cover working capital and operational needs, as well as financing for assets, equipment, contracts, and projects. 

The agreement will also cover e-commerce businesses, invoice and accounts-receivable financing, business credit cards, supply-chain financing and trade finance through guarantees and letters of credit. It will also include financing against point-of-sale proceeds. 

Monsha’at added that the agreement is part of its efforts to support and develop the micro, small and medium-sized enterprise sector. It also aims to provide entrepreneurs with innovative financing solutions to support the sector’s growth and sustainability and increase its contribution to the national economy and diversification. 

SME financing expands 

The agreement also comes as financing for Saudi Arabia’s micro, small and medium-sized enterprises continues to expand. 

Cumulative credit facilities extended to MSMEs reached about SR467 billion by the end of 2025, representing a 33 percent year-on-year increase, Ibrahim Al-Rashid, CEO of the SME Bank, said in May.  

Al-Rashid said Saudi Arabia had achieved its SME funding and lending targets in 2025 and expected the sector to see a major expansion over the following five years, driven by indirect funding, the Kafalah program and venture capital.  

The Kafalah program has supported more than 27,000 enterprises through more than 73,000 guarantees, with total financing nearing SR135 billion, according to Monsha’at.